The Child Tax Credit expanded temporarily, then returned to its previous form

The Senate did pass changes to the Child Tax Credit, but the story is more specific than a straightforward yes or no. In 2021, Congress passed the American Rescue Plan, which temporarily expanded the Child Tax Credit for the 2021 tax year. The Senate voted to include this expansion as part of that larger relief package. However, that expanded version was temporary — it applied only to 2021 — and the credit returned to its previous structure for 2022 and beyond.

The expansion made the credit larger and, for the first time, allowed the IRS to send monthly payments to families rather than waiting until tax time. Starting in July 2021, may be able to access families received advance payments. When that year ended, the credit went back to what it had been before: smaller in amount and paid only when you filed your tax return.

Key Takeaways

  • The Senate passed an expansion of the Child Tax Credit as part of the American Rescue Plan in 2021, but it was temporary and lasted only that one year.
  • The expanded credit allowed monthly payments to families starting in July 2021, which was new at that time.
  • After 2021 ended, the credit returned to its previous amount and structure, with payments made only when you file your tax return.
  • Proposals to extend or make the expansion permanent have been introduced in Congress but have not passed into law.

What the 2021 expansion actually changed

Before 2021, the Child Tax Credit was $2,000 per child under age 17. The American Rescue Plan increased it to $3,000 per child ages 6 to 17, and $3,600 per child under age 6. It also made the credit fully refundable, meaning you could receive the full amount even if you owed no income tax.

The most visible change was the monthly payment option. The IRS began sending advance payments of the credit directly to bank accounts or by mail, starting in July 2021 and continuing through December 2021. Families could choose to receive these payments or wait and claim the full credit on their 2021 tax return instead. This was the first time the Child Tax Credit had ever been paid out in installments rather than as a lump sum at tax time.

Why the expansion ended after one year

The American Rescue Plan was designed as emergency pandemic relief, and the expanded Child Tax Credit was included with an expiration date built in. Congress set it to expire after December 31, 2021. This meant that when you filed your 2022 tax return, the credit went back to $2,000 per child, and the monthly payment option disappeared.

Since then, various proposals have been introduced in Congress to extend the expansion or make it permanent, but none have passed both chambers and become law. The credit remains at its pre-2021 level unless Congress passes new legislation to change it again.

What the credit looks like now

As of the 2024 tax year, the Child Tax Credit is $2,000 per may have access to child under age 17. You claim it when you file your tax return — there are no monthly payments. The credit reduces the amount of federal income tax you owe, and if the credit is larger than your tax bill, you may receive the difference as a refund, though there are limits on how much of the credit is refundable.

To claim the credit, you need a Social Security number for each child, and your income must be below certain thresholds. The IRS website and your tax software will walk you through the requirements when you file.

Proposals that did not become law

After the 2021 expansion ended, lawmakers from both parties introduced bills to extend it or make it permanent. The Build Back Better Act, which passed the House in 2021, included a provision to extend the expanded credit through 2025, but it did not pass the Senate. Other proposals have been introduced in subsequent years, but as of now, none have become law.

This means the credit remains at the $2,000 level unless Congress acts. Checking the IRS website or consulting a tax professional can tell you the current rules for the year you are filing.

How to find out what you can claim this year

The easiest way to see whether you can claim the Child Tax Credit is to use the IRS's interactive tax assistant on IRS.gov, or to enter your information into tax software when you prepare your return. Both will ask about your children and your income and will calculate whether you may have access to and how much the credit is worth.

If you have questions about your specific situation — for example, if a child has a different last name, or if custody changed during the year — a tax professional or the IRS helpline can walk you through it. The IRS also publishes Publication 972, which explains the credit in detail.

Frequently Asked Questions

Will the expanded Child Tax Credit come back?

That depends on Congress. Proposals to extend or make the expansion permanent have been introduced, but none have passed both chambers. The credit remains at $2,000 per child unless new legislation changes it. You can check Congress.gov to see what bills are currently under consideration.

Can I still get monthly payments for the Child Tax Credit?

No. The monthly payment option ended on December 31, 2021. Now the credit is paid only when you file your tax return. You claim it on your return, and the IRS either reduces your tax bill or sends you a refund if the credit is larger than what you owe.

What if I received advance payments in 2021 but they were wrong?

When you file your 2021 tax return, the IRS will reconcile the advance payments you received with the actual credit you are may have access to to. If you received too much, you may owe it back; if you received too little, you will receive the difference as a refund. Your tax software will handle this automatically.

Does my income affect how much Child Tax Credit I can get?

Yes. The credit begins to reduce if your income exceeds certain thresholds, which vary depending on your filing status. For 2024, the phase-out begins at $400,000 for married couples filing jointly and $200,000 for single filers. Your tax software will calculate the exact amount you can claim based on your income.